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TradeSelector Newsletter

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2010-06-06 17:39:58

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Thank you for subscribing to the TradeSelector Free Newsletter.

We hope you find interest in reviewing our swing trades logs that are all now publicly available.

Also we'd like to provide you with our Weekly Forecast for this next week

For those of you that missed our free trade emails recently - we will be starting these up on a regular basis this week and you should receive another mail later today. If you haven't subscribed you can do so on our front page left column

As usual we have included our nightly comments from the previous week below to give you an idea of how close we were to the events that unfurled in the markets.

And as always we welcome new subscribers and feel free to as us any questions you have that aren't answered on our site.

Best Wishes and Trade Safe

The Tradeselector Team.

LAST WEEKS NIGHTLY COMMENTS - May 31 > June 4

6/4/2010 - Friday's move down was very strong and on much higher volume, 45% higher on the DJ-30. The move gave back the past two weeks gains and then some. Friday's close was also the lowest close since February 8th. This move down seems to be picking up steam, with every move down being stronger than the last. The drop did stop at support and tried to bounce but a break of Friday's lows will most likely take the market to the next support lines or lower before bouncing and turning back up to make another lower high. We posted 3 new inverted ETF's for this weeks picks as they are giving us the best potential for big gains on a market break down. If the market is going to stay true to form we should see this next move down go lower than the lows made on May 25th printing a new lower low. Whether that low drops below the February 8th low or not we can't say but either way the trend remains down. This week we posted line charts in the weekend commentary page take a good look at the charts, you can clearly see an M has formed and like a W in an up trend a break usually results in continuation of the trend.

6/3/2010 - The DJ-30 and SPX where up just slightly on still lower volume and the 200 day sma remains strong resistance. The NASDAQ Composite moved up fairly strong and on a slightly better volume than yesterday and is now above the 20 day sma. Volume has been low this week so it is difficult to say if this move means anything other than short covering. From listening to the President and many of the TV commentators, tomorrow's Non Farm Payroll announcement is supposed to knock the socks off all the guesstimate's that are out there, so anything less than a better than expected will not be taken well. The markets are very volatile so anything can happen, great news could cause the market to rocket higher whether that move holds or not is a different question. A miss and the market could drop very quickly so it's best to stand on the sidelines until it plays it's self out.

6/2/2010 - The markets moved up today from the start and gave us a good view on why we haven't gone all in on the short side. Yesterday we mentioned that some of our indicators are pointing up while others are pointing down. Interestingly enough the indicators that where pointing up yesterday either flattened out or turned down. That is not a sign of a bullish market. Today's bounce was also on lower volume than yesterdays move down, so the lack of volume today is more a sign of not enough sellers than it is of buyers trying to jump in thinking that this is the bottom. Keep your buy orders in on the inverted ETF's as you just never know when the buyers will start running for the exits. It may come Friday or maybe not until next week either way the trend is still down so we want to be prepared. We will post new entry prices tomorrow or on the weekend depending on how the next two days develop.

6/1/2010 - The markets were down in overnight trading and opened down, then they spent the morning moving up but the move failed and may have printed the end for this bounce. The NSDAQ Composite printed a key reversal to the down side and closed back below it's 200 day sma. The SPX and DJ-30 were unable to break back up above the 200 day sma. The indicators we use are showing divergence as some of them are pointing up and some are pointing down. When indicators are not aligned and volatility is as high as it is now, it signals turmoil in the markets and serves as a warning of a potential big move in the near future.
With the weakness we have seen recently including today, we believe any big moves we get will be to the down side, as price trumps all indicators and price is pointing down. We posted three inverted ETF's above with entry prices a bit far so hopefully we will only be filled if the markets are actually moving in our direction. The only thing that has kept us and is keeping us from going all in on the short side is the divergence in our indicators.
Indicators are used as confirmation of a trend and direction and when they do not confirm the move, entry in the direction of the trend is riskier. That does not mean it is wrong, just that it is riskier at the moment.
The indicators in Gold are also showing divergence but since price is trending up we believe any big moves will be to the up side. Most mining companies are not moving with gold and instead are moving with the market. If the market continues lower mining stocks will most likely follow, so we will need to stick with GLD, DGP and any mining stock that moves with gold like EGO has been doing.

5/31/2010 - Today we will start out by remembering and thanking the soldiers who have given their lives for our country.

Last week was tough as the volatility has increased dramatically. We saw new lows and closed the week slightly up. Tuesday's reversal to the upside is a bullish sign, however one can never know how long the move up will last. The trend is down so we need to keep that in mind as we trade this following week. Gold is the only sector that is in a confirmed bullish trend however as we saw this week it is not easy to trade, as it moves in big chunks and stops can quickly be taken out. We may need to allow for wider stops as we open more gold positions so you may want to reduce your position size so that you are still risking the same amount of money.

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